CFCL Investment regulation – Norway
Reference
Regulatory structure
Please refer to the CBL Market infrastructure - Norway for the complete information about the regulatory structure.
Holding restrictions
There are no holding restrictions for foreign investors in the Norwegian market.
Disclaimer
The information contained in the Holding Restrictions is based on the legal opinion obtained by CBL that was issued on 20 August 2018. CFCL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Holding Restrictions do not constitute legal advice and Clients should seek advice from independent professional counsel.
Clients are responsible for ensuring compliance with the holding restrictions and agree to indemnify and hold harmless CFCL, for any loss, expense, liability, damage, or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.
Holding restrictions – Register Market - Norway
Restrictions on clients
Open-ended funds
No general restrictions on client residency for holdings held through CFCL. However, certain funds may impose specific restrictions on investor domicile. Clients must refer to and abide by the restrictions (if any) contained in the fund prospectus before entering into transactions.
Ultimate beneficial owners who are Norwegian tax residents are not allowed to hold Norwegian investment funds on the register market through CFCL. It is the responsibility of the client to ensure compliance with the restriction.
Restrictions on U.S. persons
According to some nominee agreements signed with the fund managers, clients are advised that units of the funds must not be, directly or indirectly, marketed to, offered to, subscribed for, or purchased on behalf of U.S. Persons. Should client become aware of any investor having subscribed to the units of the Norwegian funds qualify as U.S. Persons, client undertakes to inform CFCL thereof without any delay.
Clients are advised that the Norwegian fund manager reserves the right to reverse such subscriptions and reserves the right to reclaim from clients any subscription fees and remuneration paid out or credited to the investor in connection with fund units for whom the subscriber is subsequently identified to be a U.S. Person. Please refer to the List of fund managers for the list of fund managers with an explicit restriction on U.S. persons stated in the nominee agreements, which will be only visible in the Attachments section of the Market Specifications – Investment Funds – Norway page if logged in as a Premium User.
Restrictions on settlement
Clients are advised that internal transfer between two accounts within CFCL is not allowed. Clients need to instruct CFCL to make the transfer through the fund manager / transfer agent. Certain funds may impose other settlement or transfer restrictions. Clients must refer to and abide by restrictions (if any) contained in the fund prospectus before entering into transactions.
For transfers involving a registration/deregistration, please refer to Market Specifications – Investment Funds – Norway for more information.
Holding restrictions – CSD Market - Norway
Holding restrictions
All restrictions that discriminated against foreign investors were abolished by 1 January 1995.
Although the Act of 1994, article number 79, that governs the acquisition of business undertakings was abolished in June 2002, according to the Norwegian Public Limited Liability Companies Act § 4-10, CBL may not hold any equity instruments through its Norwegian domestic link with Citibank Europe PLC, if such instruments are beneficially owned by Norwegian individual residents or by legal entities that are incorporated in Norway. In these circumstances, clients are not allowed to hold such financial instruments in CBL.
Within the limits established by Norwegian regulations, foreign investors can purchase shares in Norwegian companies and primary capital certificates issued by savings banks.
Under amendments to the Norwegian ownership rules for financial institutions, any person or entity who intends to acquire 10% or more of the shares or voting capital in a Norwegian financial institution, or to increase its acquisition thereof to 20%, 25%, 33% or 50%, must notify the Ministry of Finance and obtain authorisation in advance of the desired acquisition. The authorities may take up to three months to assess applications.
Clients may wish to seek independent legal advice on the interpretation of all Norwegian holding restrictions.
Restrictions on investing in financial institutions
Under amendments to the Norwegian ownership rules for financial institutions, any person or entity who intends to acquire 10% or more of the shares or voting capital in a Norwegian financial institution, or to increase its acquisition thereof to 20%, 30% or 50%, must notify the FSAN and obtain authorisation in advance of the desired acquisition. The authorities may take up to three months to assess applications.
Clients may wish to seek independent legal advice on the interpretation of all Norwegian holding restrictions.
Restrictions on investing in an exchange or securities register
Ownership is not allowed of shares that represent a larger proportion of the share capital or cast more votes pursuant to the regulation that applies for an exchange or a securities register, including the at any time prevailing consolidation rules. Acquisition of rights to ownership will be regarded as acquisition. Any person or entity who intends to acquire a qualified holding of 10% or more, with a limitation of 20% (with some exceptions) must notify the FSAN and obtain authorisation in advance of the desired acquisition.
Restriction on voting rights of an exchange or securities register
Voting restrictions is limited to 20% of the share capital or maximum 30% of the voting shares represented at the general meeting with exemptions given under sub section 2 and 3 in the Stock Exchange Act section 35 and Securities Register Act section 5.
Disclosure requirements
Introductory information and categories
This section provides general information about the disclosure requirements for fund securities holdings with which Clearstream Fund Centre must, according to the information available at the time of the present publication, comply with each of the domestic markets and fund markets covered by the Disclosure Requirements.
Fund securities that are held remotely are usually not disclosed by CFCL. A disclosure request received by CFCL regarding such a holding will be forwarded to the relevant client without assessing its validity and the CFCL Client shall handle the request on a voluntary basis.
Disclosure Requirements are only available for those countries where CFCL has a link to the respective domestic market or direct access to local domiciled funds that are held in Clearstream’s name on the register.
For fund securities holdings where CFCL has no such link or direct access to the register, clients must be aware that local laws might provide for mandatory disclosure. A disclosure request in this regard will be forwarded to clients without assessing its validity. Clients commit not to unreasonably withhold their consent to such a request and agree to indemnify CFCL for damages resulting directly from non-compliance with mandatory local disclosure requirements.
In most cases, the obligation to disclose is based on the domestic equivalent of a Companies Act, relevant investment funds act or anti-money laundering act and covers all security types.
In some instances, the obligation to disclose is based on stock exchange laws or regulations and only applies to listed domestic and foreign securities.
The Disclosure Requirements do not constitute legal advice and the Clients should seek independent professional advice in relation to fund securities deposited with CFCL, especially as, for those jurisdictions in which no disclosure obligation falls on CFCL, there may be separate disclosure requirements that apply directly to clients of CFCL, shareholders and beneficial owners.
Please note that CFCL is not always given comprehensive information or advised of changes affecting local disclosure requirements.
It remains the sole responsibility of the client to ensure compliance with local disclosure requirements. If a requirement is not met, it is the Client who will be liable to any related penalty. Clients are therefore advised to seek independent legal advice on the existence and interpretation of local disclosure requirements.
In the case of a discrepancy between the general information contained in this document and the information provided by CFCL for a specific market, as applicable (irrespective of whether this information has been obtained from an agent of Clearstream Fund Centre, or, as the case may be, a foreign regulator of a branch of CFCL), the information provided by CFCL for the specific market as applicable, shall prevail.
N.B.: In all countries, if it is suspected that a disclosure obligation has been breached (for example, that a threshold of holdings under custody has been crossed without being reported), the regulators and the authorities may have the power to investigate. Moreover, in all countries, disclosure obligations might be triggered by enforceable judgements of the competent jurisdiction of the country in question.
Disclosure categories
Clearstream Fund Centre classifies disclosure scenarios according to the following market categories:
Category 1
Markets where disclosure by Clearstream Banking as a custodian of Clearstream Fund Centre to issuers, investment fund managers and/or to regulators or market authorities is mandatory under applicable law;
Category 2
Markets where disclosure by Clearstream Banking as a custodian of Clearstream Fund Centre of account holders to issuers, investment fund managers and/or foreign regulators or market authorities is a legal obligation in respect of securities in specific circumstances;
Category 3
Markets where there is no obligation for Clearstream Banking as custodian of Clearstream Fund Centre to disclose account holders to issuers, investment fund managers and/or regulators, notwithstanding any disclosure requirement falling directly on clients of Clearstream Fund Centre, shareholders and/or beneficial owners or notwithstanding disclosure necessary to obey an enforceable judgement of the country in question.
Disclosure Requirements – Register Market - Norway
Disclosure Category: 1
In the case of holdings in securities listed on a Norwegian marketplace, and/or registered in a Norwegian Securities Register, the custodian, Clearstream Fund Centre S.A. (“CFCL”), is under an obligation to disclose the identity and holdings of clients and the identity of final beneficial owners holding applicable positions.
Consent
Clients entering into transactions in the Norwegian domestic market consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, Finanstilsynet (the Norwegian Financial Supervisory Authority)) as their attorney-in-fact, under power of attorney to collect from CFCL such information as is required to be disclosed.
Disclosure requirements
Clients are advised that local laws and regulations may require CFCL to disclose securities trading and holding information and the identity of the ultimate beneficial owners of certain securities.
- The Norwegian authorities are entitled to obtain information on the beneficial owners of any financial instrument held by the custodian in Norway that is listed on a Norwegian marketplace, and/or registered in a Norwegian Securities Register.
- Norwegian share issuing companies are entitled to obtain information on the beneficial owners of shares and primary capital certificates that they have issued and that are held in CFCL.
Therefore, clients of CFCL are only admitted to participate in the services offered by CFCL on the Norwegian market if the CFCL client delivers, upon request by CFCL, the identity of their underlying beneficial owners within four (4) business days.
Finanstilsynet has indicated that, if there is a failure to disclose requested information about beneficial ownership, it will send a request to CFCL requiring the name of the CFCL client that has failed to disclose. Finanstilsynet can also require that any undisclosed holding be transferred to a separate non-trading account until the requested information is obtained. This action would disrupt CFCL’s services for such securities.
Therefore, if a client does not provide such details, CFCL will exclude such client from any services offered on the Norwegian market and will take all necessary steps in relation thereto on the 5th business day following the disclosure request.
Background and legal basis
In the case of holdings in Norwegian equities, the custodian is under an obligation, under the Norwegian Public Limited Companies Act of 13 June 1997, No 45, the Norwegian Act on Securities Trading of 29 June 2007, No 75, ("the Securities Trading Act") section 15-2 subsection (4) and the Securities Register Act (the Act related to the registration of financial instruments) No 64 of 5 July 2002, section 6-3, to disclose the identity and holdings of clients and the identity of the ultimate beneficial owner holding applicable positions.
Norwegian share-issuing companies, as well as Finanstilsynet (NFSA), are entitled to obtain information about beneficial owners of shares and primary capital certificates held by custodians such as CFCL.
According to the legislation mentioned above, the disclosure obligation falls on the final beneficial owner that has an ownership in companies registered in Norway.
Requests can be addressed to the custodian and the shareholder or beneficial owner.
The Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (the second Shareholder’s Rights Directive “SRD II”) has been transposed into the Public Companies Act on 1 July 2023.
Obligation to report threshold crossings
Under the Securities Trading Act, Section 4-2 and the Securities Trading Regulations, Part 4, disclosure is required if an investor breaches the 5%, 10%, 15% (new), 20%, 25% (new), 331/3%, 50%, 662/3% and 90% thresholds on shares or voting capital.
Acquisition of shares resulting in ownership of more than 331/3% of the voting rights in the company will oblige the purchaser to make an offer for all remaining shares. The obligation must be restated when 40% and 50% of the shares are purchased.
The obligation is applicable for shares issued by a Norwegian company listed either on a regulated market in Norway or in another EU state, or by a company domiciled outside Norway but listed only on a Norwegian regulated market.
Whereas the earlier rules required disclosure only when thresholds were crossed as a result of acquisition or disposal of shares or rights, the new rules also require disclosure when the thresholds are crossed as a result of other circumstances. The meaning of the term “other circumstances” is made clear in the Securities Trading Regulations, Section 4-3 and may include factors relating to the notifying party’s own shares, such as share consolidation or deconsolidation.
However, the disclosure obligation may be triggered by pure inaction, typically in connection with an increase or decrease of capital. In such cases, the disclosure obligation arises immediately the party that is subject to this obligation becomes or should have become aware of the circumstance as a result of which the disclosure threshold is crossed.
Listed companies are subject to a new information requirement in any month in which there are changes in share capital or voting rights; see the Securities Trading Act, Section 5-8.
Disclosure reporting must be made to Finanstilsynet (NFSA) or any representative appointed by the NFSA.
Listed companies must report to a storage mechanism (OAM) appointed for the NFSA.
The beneficial owner or carrier of rights is responsible for reporting to the authorities. Shares held by “close associates” are regarded as equivalent to the acquirer’s or disposer’s own shares, rights to shares or voting rights. Close associates include any undertaking within the same group as the shareholder.
Sanctions
If the custodian, shareholder or beneficial owner does not comply with the reporting requirements, the account may be blocked and the shares transferred to a non-trading account. A fine can be the consequence if the custodian, shareholder or beneficial owner fails to properly discharge a disclosure obligation. This is described as follows in the Securities Trading Act Section 17-3: the NFSA can also withdraw the nominee license to the account holder (in this case, CFCL).
According to the Securities Trading Act 17-3, additional fines may be imposed:
"(3) A fine shall be handed down to anyone who grossly or repeatedly violates, wilfully or through negligence, sections 4–2 or 4–3 subsection (1) or (2), see regulations pursuant to these provisions, or to anyone who wilfully or through negligence violates section 4–3 subsections (3) or (4); see regulations pursuant to these provisions."
Complicity is subject to the same penalties.
Please refer to Disclosure Requirements – Norway for complete information on disclosure requirement for Norway.
Disclosure requirements – Register Market - Norway
Disclosure Category: 1
Clearstream Fund Centre S.A. (“CFCL”), as an authorized nominee in Norway, is under an obligation, on demand, to disclose the identity and holdings of clients and ultimate beneficial owners in the case of holding Norwegian investment funds. The obligation also applies to unit holders who are liable to meet the obligation to submit statements of earnings to the tax authorities in Norway.
Consent
In order to comply with the applicable legislation, Clients with holdings in Norwegian investment funds or entering into transactions in Norway market must consent, and are hereby deemed to consent, to the required legal disclosure. Such consent includes the appointment of the requestor (for example, the Fund Manager, Transfer Agent, Regulator) as their attorney-in-fact, under power of attorney, to collect from CFCL the required information to be disclosed. Clients who do not grant such authority cannot hold such investment funds / financial instruments in their accounts with CFCL.
Disclosure Requirement
Clients are advised that local laws and regulations oblige CFCL to disclose information on CFCL clients and ultimate beneficial owners for securities registered in the nominee account to the party that is entitled by law to receive such information within the stipulated or otherwise deemed suitable time frame by the authority in question. Norwegian public authorities authorized to receive such information include:
- The Norwegian Tax Administration (Skatteetaten)
- The Financial Supervisory Authority of Norway (Finanstilsynet)
Clients are required to inform CFCL if they are the beneficial owner of these Norwegian funds or not. If they are not the ultimate beneficial owner, clients need to ensure that CFCL, at all times, is allowed legal and practical access to information regarding the identity of the beneficial owner. Clients subject to provisions of confidentiality in their home country must obtain the necessary legal basis for disclosure through client agreements (prior consent). In instances where there are multiple levels or intermediaries between CFCL and the ultimate beneficial owner, clients need to ensure that a legal basis exists requiring “clients at each level” to submit the identity of their respective clients upon request.
Therefore, if a client does not provide CFCL this legal and practical access to the required beneficial owner information, CFCL will take all necessary action required of a nominee in Norway, such as blocking transfers on the undisclosed holdings, until the disclosure request has been complied with and/or refusal of the nominee assignment by the client.
Background and legal basis
In the case of holding Norwegian investment funds, CFCL is obliged under the following legislation to disclose the identity and holdings of clients and/or ultimate beneficial owners.
- Securities Funds Regulations, section 13-4
- Securities Register Act, section 6-3 (4) & section 8-2
- Act relating to measures to combat money laundering and the financing of terrorism, etc. (Money Laundering Act)
- Regulation no. 1360 of 23 November 2016 to the Tax Administration Act section 7-3-4 (as amended, and other applicable Norwegian tax laws)
Sanctions
Failure to comply with the disclosure request from the fund managers, its agents, the regulators and/or tax authority within in the stipulated time frame may result in blocking of undisclosed holdings, freezing of accounts or compulsory redemption of the fund units/shares imposed by the fund managers or regulators. Non-compliance with the disclosure requirements may also result in fines, and/or the withdrawal of authorization to act as a nominee for CFCL.
The client undertakes to hold CFCL harmless and to indemnify CFCL from any loss, claim, liability, or expense asserted against or imposed upon CFCL as a result of the client failure, whatever the failure, to comply with these disclosure requests.
Disclaimer
The information contained in the Disclosure Requirements is based on the legal opinion obtained by CBL acting as a sub-custodian for CFCL that was issued on 20 August 2018. CFCL believes the information to be correct as of that date but disclaims any responsibility as to the accuracy and completeness of the information after that date. In the case of discrepancy between the information provided by CFCL and the local laws and regulations, the latter shall prevail. The Disclosure Requirements do not constitute legal advice and Clients should seek advice from independent professional counsel.
Clients are responsible for ensuring compliance with the disclosure requirements and agree to indemnify and hold harmless, CFCL, for any loss, expense, liability, damage or claims, whether direct or indirect, against or incurred by CFCL arising out of or resulting from such non-compliance.
Disclosure requirements – CSD Market - Norway
Disclosure Category: 1
In the case of holdings in securities listed on a Norwegian marketplace, and/or registered in a Norwegian Securities Register, Clearstream Banking (CBL), as the custodian of Clearstream Fund Centre S.A. (“CFCL”), is under an obligation to disclose the identity and holdings of clients and the identity of final beneficial owners holding applicable positions.
Consent
Clients entering into transactions in the Norwegian domestic market consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, Finanstilsynet (the Norwegian Financial Supervisory Authority)) as their attorney-in-fact, under power of attorney to collect from CFCL such information as is required to be disclosed.
Disclosure requirements
Clients are advised that local laws and regulations may require CFCL to disclose securities trading and holding information and the identity of the ultimate beneficial owners of certain securities.
The Norwegian authorities are entitled to obtain information on the beneficial owners of any financial instrument held by the custodian in Norway that is listed on a Norwegian marketplace, and/or registered in a Norwegian Securities Register.
Norwegian share issuing companies are entitled to obtain information on the beneficial owners of shares and primary capital certificates that they have issued and that are held in CFCL.
Therefore, clients of CFCL are only admitted to participate in the services offered by CFCL on the Norwegian market if the CFCL client delivers, upon request by CFCL, the identity of their underlying beneficial owners within four (4) business days.
Finanstilsynet has indicated that, if there is a failure to disclose requested information about beneficial ownership, it will send a request to CFCL requiring the name of the CFCL client that has failed to disclose. Finanstilsynet can also require that any undisclosed holding be transferred to a separate non-trading account until the requested information is obtained. This action disrupt CFCL’s services for such securities.
Therefore, if a client does not provide such details, CFCL will exclude such client from any services offered on the Norwegian market and will take all necessary steps in relation thereto on the 5th business day following the disclosure request.
Background and legal basis
In the case of holdings in Norwegian equities, the custodian is under an obligation, under the Norwegian Public Limited Companies Act of 13 June 1997, No 45, the Norwegian Act on Securities Trading of 29 June 2007, No 75, ("the Securities Trading Act") section 15-2 subsection (4) and the Securities Register Act (the Act related to the registration of financial instruments) No 64 of 5 July 2002, section 6-3, to disclose the identity and holdings of clients and the identity of the ultimate beneficial owner holding applicable positions.
Norwegian share-issuing companies, as well as Finanstilsynet (NFSA), are entitled to obtain information about beneficial owners of shares and primary capital certificates held by custodians such as CFCL.
According to the legislation mentioned above, the disclosure obligation falls on the final beneficial owner that has an ownership in companies registered in Norway.
Requests can be addressed to the custodian and the shareholder or beneficial owner.
The Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (the second Shareholder’s Rights Directive “SRD II”) has been transposed into the Public Companies Act on 1 July 2023.
Sanctions
If the custodian, shareholder or beneficial owner does not comply with the reporting requirements, the account may be blocked and the shares transferred to a non-trading account. A fine can be the consequence if the custodian, shareholder or beneficial owner fails to properly discharge a disclosure obligation. This is described as follows in the Securities Trading Act Section 17-3: the NFSA can also withdraw the nominee license to the account holder (in this case, CBL).
According to the Securities Trading Act 17-3, additional fines may be imposed:
"(3) A fine shall be handed down to anyone who grossly or repeatedly violates, wilfully or through negligence, sections 4–2 or 4–3 subsection (1) or (2), see regulations pursuant to these provisions, or to anyone who wilfully or through negligence violates section 4–3 subsections (3) or (4); see regulations pursuant to these provisions."
Complicity is subject to the same penalties.
Obligation to report threshold crossings
Under the Securities Trading Act, Section 4-2 and the Securities Trading Regulations, Part 4, disclosure is required if an investor breaches the 5%, 10%, 15% (new), 20%, 25% (new), 331/3%, 50%, 662/3% and 90% thresholds on shares or voting capital.
Acquisition of shares resulting in ownership of more than 331/3% of the voting rights in the company will oblige the purchaser to make an offer for all remaining shares. The obligation must be restated when 40% and 50% of the shares are purchased.
The obligation is applicable for shares issued by a Norwegian company listed either on a regulated market in Norway or in another EU state, or by a company domiciled outside Norway but listed only on a Norwegian regulated market.
Whereas the earlier rules required disclosure only when thresholds were crossed as a result of acquisition or disposal of shares or rights, the new rules also require disclosure when the thresholds are crossed as a result of other circumstances. The meaning of the term “other circumstances” is made clear in the Securities Trading Regulations, Section 4-3 and may include factors relating to the notifying party’s own shares, such as share consolidation or deconsolidation.
However, the disclosure obligation may be triggered by pure inaction, typically in connection with an increase or decrease of capital. In such cases, the disclosure obligation arises immediately the party that is subject to this obligation becomes or should have become aware of the circumstance as a result of which the disclosure threshold is crossed.
Listed companies are subject to a new information requirement in any month in which there are changes in share capital or voting rights; see the Securities Trading Act, Section 5-8.
Disclosure reporting must be made to Finanstilsynet (NFSA) or any representative appointed by the NFSA.
Listed companies must report to a storage mechanism (OAM) appointed for the NFSA.
The beneficial owner or carrier of rights is responsible for reporting to the authorities. Shares held by “close associates ” are regarded as equivalent to the acquirer’s or disposer’s own shares, rights to shares or voting rights. Close associates include any undertaking within the same group as the shareholder.
Please refer to Disclosure Requirements – Norway for complete information on disclosure requirements for Norway.